Forest Products Harvest Tax

The Forest Products Harvest Tax (FPHT) is a tax applied to timber harvested from all land in Oregon, except most tribal lands. No distinction is made between timber harvested from private lands and government-owned lands.

The Oregon Legislature and the Oregon Forest Resources Institute board of directors develop the FPHT tax rate. The tax is applied to each one thousand board feet of timber (MBF) harvested. The tax law exempts the first 25 MBF of timber harvested by an owner each year. Contact the Oregon Department of Revenue for current year rates.

The FHPT applies to logs scaled as utility grade or better, and to logs sold by the ton. Loads of chips are taxable unless they are made from logs that do not meet utility grade or better, and the chips are to be used as “hog fuel.” The Oregon Department of Revenue has conversion rates for converting tons to MBF.

Tax forms for the FPHT return are only available through the Department of Revenue. The agency mails forms in December of the year of harvest or in January of the following year. The agency identifies potential harvesters and mails the forms based on information provided on the Notification of Operation filed with the Oregon Department of Forestry prior to the harvest. Blank tax forms are not available. The law requires that the completed return be received by the Department of Revenue by January 31 of the year following the harvest.

If you expect to owe a Forest Products Harvest Tax of $1,500 or more for the calendar year, you are required to make quarterly estimated tax payments. You must submit an "Estimate of Timber Tax Liability" coupon with your payment. These coupons are available from the Department of Revenue. The receipts from this tax program are dedicated to the funding of state-run programs that promote forest practices act administration, forest research, fire prevention and fire suppression, and improved public understanding of Oregon's forest resources.

Distribution percentages of FPHT receipts vary from one year to the next. The portions of the tax rate allocated to the Department of Forestry's Forest Practices and Protection Fund and to OSU Research are determined by the Legislature every two years. The Oregon Forest Resources Institute sets its rate annually based on guidelines established in law.

Revenues are distributed quarterly to:

1. Administration of Oregon's Forest Practices Act.

The Oregon Forest Practices Act encourages forest management that protects forest resources including soil, air, water, fish, and wildlife resources. It also helps preserve scenic resources along visually sensitive corridors and reduces the risk of injury or death from landslides directly related to poor forest practices. Currently, the FPHT covers 40 percent of the cost of administering this law. The state General Fund pays the other 60 percent.2.

2. Development of forestry research through Oregon State.

University Oregon State University supports forestland owners in Oregon by providing forestry research through the Oregon Forest Research Laboratory (FRL). The FPHT receipts provide approximately 10 percent of the research budget for the FRL.

3. Establishment of the Oregon Forestland Protection Fund.

The Oregon Forestland Protection Fund serves as an "insurance policy" against wildland fires that are beyond the capability of the local district fire protection forces. The FPHT receipts provide 50 percent of the budget for this fund. The state General Fund pays the other 50 percent.

4. The Oregon Forest Resources Institute.

The Oregon Forest Resources Institute (OFRI) was created in 1991 to improve public understanding of the state's forest resources. OFRI provides information on Oregon's forest practices and encourages sound forest management. The institute is 100 percent funded by the Forest Products Harvest Tax